Alisha R
09 September 2024 12:01
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Alisha R
09 September 2024 12:01
Pertanyaan
How does inflation impact an economy?
How does inflation impact an economy?
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Anggraeni K
09 September 2024 12:09
<p>Inflation impacts an economy by eroding the purchasing power of money, leading to higher costs of living and potentially reducing real income if wages don't keep up. It can prompt central banks to adjust interest rates, influencing borrowing and spending. Inflation creates uncertainty, which can deter investment and complicate financial planning for businesses. Additionally, it can benefit borrowers by decreasing the real value of debt but may harm those with fixed incomes or savings. Overall, while moderate inflation can reflect economic growth, high or unpredictable inflation can create economic instability and inequality.</p>
Inflation impacts an economy by eroding the purchasing power of money, leading to higher costs of living and potentially reducing real income if wages don't keep up. It can prompt central banks to adjust interest rates, influencing borrowing and spending. Inflation creates uncertainty, which can deter investment and complicate financial planning for businesses. Additionally, it can benefit borrowers by decreasing the real value of debt but may harm those with fixed incomes or savings. Overall, while moderate inflation can reflect economic growth, high or unpredictable inflation can create economic instability and inequality.
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Martha G
16 September 2024 10:13
The answer is erotion of real income. Sorry i never came back because without permission something.
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